Stocks and Bonds: Earnings Worries Push Markets Lower

Stocks fell slightly on Friday and the broad market closed lower for the fourth consecutive week as negative consumer confidence data and mixed earnings reports continued to thwart hopes that the spring rally — and broader recovery — would be sustained. Now the question is whether the economy is stabilizing or losing ground again.

The Dow Jones industrial average shed 36.65 points, or 0.45 percent, to close at 8,146.52. The Standard & Poor’s 500-stock index fell 3.55 points, or 0.40 percent, to 879.13. The Nasdaq composite index closed at 1,756.03 after posting a gain of 3.48 points, or 0.20 percent.

A 2.66 percent fall in shares of the energy giant Chevron weighed down the Dow at the end of a week when oil markets foundered. The company warned investors on Friday to expect much weaker second-quarter results compared with 2008 because of the slide of the dollar. Foreign currency losses totaled more than $400 million in April and May.

Slack energy demand worldwide exacerbated the situation for American oil producers. Crude oil settled at $59.89 a barrel Friday, down 52 cents.

Separately, a Reuters/University of Michigan survey that showed consumer sentiment at its lowest since March spoiled the possibility that a jolt of spending could restart the recovery. Consumers said they would hold off on buying cars and appliances, according to the survey.

“Now you need a rapid improvement in the job market to give consumer spending a chance,” said Aaron Smith, a senior economist at Moodys.com. But Mr. Smith was pessimistic. He cautioned that consumers could remain tight-fisted. “If spending breaks lower you’re going to unwind a lot of the loosening in the financial market,” he said cash advance loans.

Pessimism in equities drove investors toward low-risk government bonds. The Treasury’s benchmark 10-year note rose 26/32, to 98 16/32, and the yield fell to 3.30 percent, from 3.40 percent late Thursday.

The dollar also moved opposite stocks, rising by 0.50 percent against a trade-weighted basket of six major currencies.

Equity markets are now looking toward next week’s quarterly results.

But so far, warned Bill Schultz, the chief investment officer of McQueen, Ball & Associates: “You’ve got earnings that’s making people very concerned about what’s coming down the pike.”

Overseas, Japan’s Nikkei stock average fell 0.04. In Europe, Britain’s FTSE 100 was down 31.49 points, or 0.76 percent, Germany’s DAX index fell 53.76 points or 0.1.16 percent. France’s CAC-40 lost 1.4 percent, or 42.84 points.

One bit of good news Friday: the Commerce Department said the trade deficit narrowed to $26 billion in May, the lowest level in more than nine years. The report seemed to temper some of the market’s losses. Yet, the reason for the narrowing of the deficit was primarily a sharp decrease in imports, an indication that consumers had cut their spending drastically.

General Motors emerged from bankruptcy protection faster than expected, after just a little over a month. Fritz Henderson, the chief executive, announced an overhaul of the company management and an array of new products for domestic and overseas markets.

Stocks and Bonds: Earnings Worries Push Markets Lower

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